4:05pm: US stocks finish the day in the red      

US stocks continued to decline on Monday afternoon as inflation, rising interest rates, and the continued impact of China’s pandemic restrictions and the war in Ukraine weighed on the minds of investors. 

At the close, the Dow was down 654 points or 2% at 32,246 points and the S&P 500 had shed 132 points or 3% at 3,991 points.   

The tech-laded Nasdaq had slipped 521 points or 4.3% to finish the day at 11,623 points.

12:05pm: US stock losses continue at noon

US stocks continued to slip into the red at midday, with investors looking to the release of the latest US inflation data and corporate earnings this week amid growing recession fears. 

At noon, the Dow had lost 533 points or 1.6% at 32,366 points.

The S&P 500 and Nasdaq had slumped 2.4% and 3.2% respectively.

CMC Markets UK chief market analyst Michael Hewson said that US markets had opened sharply lower amid concerns the global economy was headed for a significant slowdown as the Chinese government shows little sign of deviating from its zero-COVID policy.

“Today’s weakness has also seen the S&P 500 follow the Nasdaq in falling to one-year lows, and is within touching distance of the 4,000 level, a break of which could trigger further losses,” Hewson said.

In terms of major movers, shares of electric vehicle start-up company Rivian Automotive Inc (NASDAQ:RIVN) had dropped about 15% ahead of the release of the company’s 1Q earnings after the close on Wednesday.

The sell-off comes after reports that key stakeholder in the business Ford Motor Company (NYSE:F) had sold 8 million of its shares.  

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9:40am: US stocks open in the red

US stocks have opened lower on Monday amid continued inflation concerns as investors look ahead to the release of the latest US inflation data later this week.  

Shortly after the open, the Dow was down 480 points at 32,419 points.

The S&P 500 shed 72 points at 4,051 points and the Nasdaq had dropped 244 points at 11,901 points.

6.30am: Stocks seen heading lower

US stocks were expected to open lower on Monday as investors continue to worry that inflation will stay at elevated levels even as the Federal Reserve raises interest rates aggressively.

Last week, the Fed hiked interest rates by 50 basis points and US non-farm payrolls rose by a higher-than-expected 430,000, underscoring the strength of the labor market in the world’s biggest economy and putting the focus firmly on US inflation data due out the middle of this week. 

Futures for the Dow Jones Industrial Average fell 1.3% in pre-market trading, while those for the broader S&P 500 index shed 1.7%, and contracts for the Nasdaq-100 lost 2.0%.

“On Wednesday, the US will reveal its latest inflation figure, and the CPI is expected to have eased to 8.1% in April, from 8.5% printed a month earlier,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“If the jobs data couldn’t improve sentiment, as a strong data would fuel the hawkish Fed expectations, and a soft data would fan the recession fears, sign of softer inflation could improve appetite in risk assets, and trigger a positive correction in US indices,” she added.

Either way, equity markets look set for a continued rocky ride, what with bond yields rising again. The yield on the benchmark 10-year Treasury rose to 3.17% on Monday from 3.12%, putting it on the path to new multi-year highs.

Over in China, Premier Li Keqiang warned of a “complicated and grave” labor market in the world’s most populous country. Investors are worried that the Chinese government’s tough COVID-19 policy will crimp growth and trigger supply chain constraints.

“(T)he worsening situation in China and Xi government’s stubbornness in keeping a Mission Impossible in place will likely cost more to China and to the world economy in terms of growth, and oil demand in the coming months,” said Ozkardeskaya.

Elsewhere, oil futures were softer but still above key levels, indicating that commodity price pressures will remain a concern in the near future.

WTI futures were down 1.9 % at $107.65 a barrel, while Brent crude futures lost 1.7% to $110.48 a barrel.

Ozkardeskaya noted that the leaders of G7 nations pledged to ban Russian oil on Sunday but added that any impact is likely to be muted because markets have already priced this in.

While the possibility of a slowdown in China may well dampen demand for oil, news that the US plans to buy crude to refill strategic reserves may well turn out to be an offsetting factor, she added.

Contact the author at jon.hopkins@proactiveinvestors.com